The most common mistake real estate investors make when leveraging a 1031 Exchange is trying to do it on their own. Here, we will explain:
- Why managing a 1031 Exchange on your own is not worth the cost.
- When to submit your 1031 Exchange.
The Mistake: Never Submitting the Exchange Intake
Most real estate investors never submit a 1031 Exchange because the process seems too complicated. To solve this problem, Plenti Financial built the Plenti Exchange Portal, which automates every step of documentation, submission, and communication with necessary parties according to the timeline of each particular exchange.
The Solution: Identify and Submit Earlier vs. Later
In order to prepare to file an exchange, it is important to identify prospective relinquished/acquired properties as soon as possible. Once you identify properties, you are limited to relinquishing and acquiring from that list of identified properties. It’s not ideal to be mid-exchange and switch out to identify different properties. If a property sale closes and the exchange has already been submitted, it is not possible to change the identified properties. A successful 1031 strategy requires intention in identifying properties as early as possible. For help building your 1031 Exchange strategy, schedule a consultation with one of our exchange experts.
Conclusion
Use the information provided here to make a more informed decision about the best way an exchange can serve you. Use the information here to identify ways an exchange could serve your portfolio, and schedule a consultation with one of our qualified professionals to better strategize how a 1031 could improve your real estate investments.
